Wools of New Zealand marks first full year

Wools of New Zealand executive director Mark Shadbolt. Photo / Supplied

Wool exporter Wools of New Zealand marked its first full year as a commercialised company last week, hosting its end of year shareholder meeting in a traditional wool stronghold - Southland's Mt Peel.

The company, which last year weaned itself off its five-year market development fee for growers, issued an additional 11million shares to its supportive and transacting shareholders over the period.

Those growers transacted 8 per cent more wool this year via the company's direct to scour, at 6.2 million kg, with another 1.9 million kg of greasy wool transacted through the online NFX platform.

However, challenging market conditions, in particular weaker demand from China, had translated to an overall decline in revenues to $22.8 million from $25.4 million the prior year, bottom line profits tumbling to under $0.1 million (2018: $0.3 million).

This included a one-off impairment cost related to a sampling joint venture in the UK.

Executive director Mark Shadbolt told shareholders the company would continue to evaluate new technologies, focused on moving into non-traditional strong wool opportunities.

He said the company was proceeding strongly in its GlacialXT scour process, with the support of New Zealand Trade and Enterprise, and had also invested in an odour-neutralising application to overcome challenges in the use of wool in key applications.

"Odour neutral is becoming more important, particularly for applications where our wool is featuring in bedding products" he said.

Mr Shadbolt said outside sales innovations such as NFX, forward contracts continued to be a fundamental part of the sales model, providing price certainty for growers.

"Our ability to negotiate these favourable contracts, including our ongoing lambswool and second shear contracts, is underpinned by delivery of wool in specification, on time and to required volumes".

He said the company's forward lambswool contract also continued to be a leader in the market.